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Economics

Default Options and Nudge Theory in Public Policy

Quick fact

When companies switched 401(k) pension plans from opt-in to automatic enrollment (with an opt-out option), participation rates jumped from around 40% to over 90% — simply by changing the default.

Why this is interesting

You’ve probably been nudged thousands of times without realizing it. What if your default pension plan, organ donation status, or even your phone’s privacy settings were quietly chosen for you?